Ministry of economy: cotton fiber processing goes up 40%

According to the Ministry of economy of Uzbekistan, cotton fiber processing volume reached 40% in 2016, while in 1991 it was 7% only.

Today, the industry exports textile products to more than 50 countries. In recent years, the export has been expanded to Brazil, Chile, Croatia, Nigeria and other countries.

The Presidential Decree dated 21 December 2016 “On measures for further development of the textile, garment and knitwear industry in 2017-2019” has opened even more possibilities for improvement of the sector.

According to the document, by 2020 all available capacities of the cotton fiber are to be processed within the Republic.

The analysis shows that today, the yarn constitutes nearly 50% of exports. Priority is to increase exports of products with high added value due to the gradual reduction of yarn export. Currently, the share of finished products in the total volume of production amounts to 47%, in the future it is planned to increase this figure to 65.5%, as well as to increase the share of finished products in the export from 41 to 70%.

Some $2.2b. of investments (nearly half foreign) are to be involved into the industry in 2017-2020. Special textile complexes shall operate on the basis of a four-phase system that includes all processes, starting from processing ending with the production of finished products. More than 27 thousand new jobs will be created. It is also planned to organize 120 new and upgrade more than 10 enterprises.

The allocation of credits for projects will be implemented based on a completely new mechanism. Commercial banks will co-Finance the projects and to open a credit line for the purchase of modern spinning, weaving and painting equipment. In projects implemented at the expense of attracted funds of commercial banks, the banks or investment companies can participate with a share up to 100 percent in the share capital of the company. Banks have the right to engage in loans capitalization of interest accrued in the investment period, and not to apply restrictions on equity participation in the authorized capitals of the enterprises.

One of the key features of the program is the development and implementation of new industry standards for design and construction of textile enterprises on the basis of foreign experience. These standards will ensure lower costs of construction and installation works and pre-emptive use of local building materials. The terms for tax and customs incentives provided to encourage the processing of raw cotton, have been extended until January 1, 2020.